The temporary regulation on the tax-privileged inflation premium, which was originally valid until the end of 2023, was unexpectedly extended, albeit with significant modifications. This explains the key adjustments to what is now known as the “employee bonus” for 2024.
Changes to the employee bonus for 2024:
- The name was changed to “employee bonus”.
- While in 2022 and 2023, up to EUR 2,000 per year and employee was still tax and duty-free, with an additional allowance of EUR 1,000 under certain conditions, the bonus must now be fully linked to wage-setting measures.
- The payment of an employee bonus is subject to certain formal criteria: Inclusion in the collective agreement, agreement based on a collective agreement authorization, conclusion of a works agreement in the absence of a collective agreement part of the contract on the employer’s side or a contractual agreement for all employees should no works council exist.
Existing regulations that remain unchanged:
- The premium must represent an additional benefit that goes beyond the usual payments to date. This does not affect inflation premiums already paid for 2022 and 2023.
- The premium remains fully exempt from tax and contributions.
- The payment has no influence on the annual sixth in accordance with § 67 para. 2 EStG and is not offset against it.
- The payment of (wage tax-free) employee profit sharing and an employee bonus is tax-free in 2024 up to a total amount of EUR 3,000. If the sum for one person exceeds this amount, an assessment obligation arises.
